Interstate National Dealer Services, Inc. Announces Q3 Results
2 September 1998
Interstate National Dealer Services, Inc. Announces Record Third Quarter Results
MITCHEL FIELD, N.Y.--Sept. 2, 1998--Revenues Increase 30% Resulting in Net Income Rise of 38%
Interstate National Dealer Services, Inc. today reported an increase in revenues of approximately 30% to a record $13,775,114 for the three months ended July 31, 1998, compared to $10,614,028 for the same period a year earlier.
Net income for the three months ended July 31, 1998 increased approximately 38% to $915,187, or $0.19 per share on 4,942,004 diluted weighted average shares outstanding compared to net income of $662,516, or $0.17 per share on 3,966,080 diluted weighted average shares outstanding for the comparable period a year earlier.
Revenues for the nine months ended July 31, 1998 rose approximately 40% to $35,875,823 compared to $25,598,342 for the nine months ended July 31, 1997. Net income for the nine months ended July 31, 1998 increased approximately 60% to $2,468,042, or $0.50 per share on 4,967,451 diluted weighted average shares outstanding compared to $1,543,864, or $0.40 per share on 3,813,143 diluted weighted average shares outstanding for the nine months ended July 31, 1997. Net income for the nine months benefited by approximately $300,000 as a result of a settlement of a dispute with an unaffiliated party in the first quarter.
Mr. Chester J. Luby, Chairman and CEO, stated, "Interstate's standing in the extended service contract industry as a supplier of high quality products and service continues to grow and has again resulted in significant new business. Our continued aggressive efforts to enroll additional producers and to develop a broader array of products were rewarded in the most recent quarter. Our operational efficiency is steadily improving and we are able to handle the substantial increase in new business without incurring a commensurate increase in selling, general and administrative (SG&A) costs. Consequently, SG&A costs declined to 43% of revenue in the most recent period compared to 48% a year earlier and 46% in each of the first two quarters; a satisfactory level but one we hope to improve upon in the future."
"Interstate's balance sheet strengthened further in the most recent quarter," Mr. Luby noted, "as cash and cash equivalents and US Treasury Notes, at cost rose to $34.6 million, or $6.96 per diluted weighted average shares outstanding from $31.8 million, or $6.42 per diluted weighted average shares outstanding in the second quarter. We see no lack of opportunities to maintain our growth in the future and we believe that we have the programs, products and people in place to maintain both our high standards and strong growth."
Interstate is a leading nationwide provider of service contracts and extended warranties, primarily for new and used cars and recreational vehicles, and also for watercraft, motorcycles and other power sport vehicles.
This press release contains forward-looking statements, which are subject to risks and uncertainties. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Report on Form 8-K filed with the Securities and Exchange Commission on December 23, 1996.
INTERSTATE NATIONAL DEALER SERVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
For the Nine Months For the Three Months
Ended July 31, Ended July 31,
1998 1997 1998 1997
----------- ----------- ----------- -----------
Revenues $35,875,823 $25,598,342 $13,775,114 $10,614,028
Operating income 2,502,023 2,057,928 1,120,190 916,237
Other Income (a)1,568,433 512,609 388,467 186,854
Income before taxes 4,070,456 2,570,537 1,508,657 1,103,091
Net income 2,468,042 1,543,864 915,187 662,516
NET INCOME PER SHARE:
Basic $0.53 $0.45 $0.20 $0.19
Weighted average
shares outstanding 4,631,932 3,395,048 4,640,933 3,401,368
Diluted $0.50 $0.40 $0.19 $0.17
Weighted average shares
outstanding 4,967,451 3,813,143 4,942,004 3,966,080
(a) Includes $500,000 received in the first quarter as the result of a
settlement of a dispute.
CONDENSED BALANCE SHEET
July 31, October 31,
1998 1997
------------- -------------
(Unaudited)
Cash and cash equivalents
and US Treasury Notes, at cost $34,577,528 $26,856,861
Working capital 36,376,331 29,704,256
Total assets 49,955,736 41,282,561
Stockholders' equity 17,257,103 14,758,838